Have you ever been asked why it's necessary
to go to the trouble and expense of obtaining a title insurance
policy when anyone can go and examine public records themselves?
As you know, the public records are only a part of the story.
Following is a list of factors, often referred
to as "hidden risks', which can influence the owner's total
rights to a property.
MARITAL STATUS OF OWNER INCORRECTLY GIVEN
A man may say he is single, although secretly
married or perhaps divorced in another state, resulting in a
claim of Right by a person whose existence was not suspected.
UNDISCLOSED HEIRS
Cases of this kind include children born after
the date of a Will and heirs overlooked due to incorrect finding
of heirship by courts.
MISTAKEN LEGAL INTERPRETATION
This is always a risk, especially in construing
Wills. Interested parties may contest court rulings, establishing
new claims to property ownership.
MENTAL INCOMPETENCE
It may later appear that the person who executed
a deed or release was a minor, or under mental disability at
the time. If so, the document is subject to cancellation and
may be set aside.
FRAUD AND FORGERY
The owner may have been fraudulently impersonated.
Deeds, releases, mortgages or other documents might be forgeries.
DEFECTIVE DEEDS
A deed may have been delivered without consent
of the owner or after his death. A document may have been executed
under an expired power of attorney. The name of the grantee
may have been inserted in the deed after its delivery. The officer
of a corporation may not have been properly empowered to act.
In any case, the action may result in loss of title.
CONFUSION DUE TO SIMILAR OR IDENTICAL NAMES
Despite a careful investigation to prevent
it, some confusion of identity still is possible. For example,
a wife may divorce her husband and the husband may remarry another
woman with the same first name as his first wife. The second
wife's signature might then appear to dispose of the first wife's
rights, although, it could not do so. Two members of the same
family often have the same name, as in the case of father and
son. The title may be in one name while the deed is executed
by the other having no title.
ERRORS IN RECORD OF CLERICAL WORK
A document may be missed in searching. Entries
of indexing in records may be in error.
Today, real estate owners do not want to be
worried about unknown risks of possible losses. What they want
is protection. A title insurance policy assures them of this
protection and assumes these liabilities.
SOURCE: Real Estate Newsline
